China’s Zhejiang Geely have announced plans to take a 51% stake in Lotus as part of a deal to invest in the historic British sports car maker’s parent company, Proton.

The Geely holding company will take a 49 per cent stake in the Malaysian car manufacturer Proton according to the deal announced at the end of May.

Part of that deal will also include the Geely taking control of Proton’s subsidiary company in the UK, Lotus, with a 51% stake.

Lotus, latest published figures showed a loss of £27.6m in the 12 months ending March 31 2016, is a leader in composite materials and lightweighting technology. Geely will look to deploy this technology across its other vehicles to help them meet stringent emissions targets in China. The Lotus company also includes an engineering division that sells sports car technology to other companies.

The Chief financial officer of Geely holdings, Daniel Donghui Li, said:
“Reflecting our experience accumulated through Volvo Car’s revitalisation, we also aim to unleash the full potential of Lotus Cars and bring it into a new phase of development by expanding and accelerating the rolling out of new products and technologies.”

Yale Zhang, director of Shanghai-based consulting company Automotive Foresight, commented that it was likely that Geely would use this acquisition as a springboard into large Asia markets such as Malaysia and Thailand. “These are big markets and they are growing pretty fast. but they are very difficult markets because the Japanese entered early and set very high standards.

The deal with Proton is subject to regulatory approval and the signing of the definitive agreement, expected in July, according to the Geely statement.

Geely already owns Volvo Cars and The London Taxi Company in Europe.

Proton has been looking for an international partner to help it expand its range of products and improve the quality of its cars amid falling market share in its home territory.

Proton was founded in 1983 by the former Malaysian prime minister Mahathir Mohamad and was once the dominant manufacturer in its home market with three-quarters of all car sales. By 2016 its share had fallen to 15 per cent due to fierce competition from cheap imports.